- Televisions, smart watches, and headphones imported from China are days away from seeing a 15% tariff.
- Computing, mobile phones and gaming consoles will see the 15% duty on Dec. 15.
- CEO Corie Barry said that around 60% of what Best Buy pays to produce goods goes to China.
Some of Best Buy’s most popular products including televisions, smart watches, and headphones imported from China were just days away from seeing a 15% tariff as the company stock fell 9% Thursday morning.
Products in computing, mobile phones and gaming consoles will see the 15% duty on Dec. 15. The Trump administration announced earlier this month that some tariffs would be delayed in order to keep prices for consumers low during the holiday season.
But executives were determined to put investors at ease, emphasizing that they factored the impending tariffs into their fiscal-year forecast and still raised the earnings guidance. It also said it’s priced in the announcement from the Trump administration six days ago to hike the tariff rate to 30% from 25% on $250 billion in Chinese products.
Still, when Best Buy looks at the cost of the goods it sells, including labor, materials and overhead, about 60% goes to China currently.
“But it’s a massively smaller portion of that that is actually, we think, affected by the tariffs, because of some of the negotiating power, because of the mitigating strategies that we are putting in place,” she said in a call with analysts.
Date: September 05, 2019